Are Homebuyers Starting to Hit the ‘Pause’ Button?

For the last several years, buyer demand has far exceeded the housing supply available for sale. This low supply and high demand have led to home prices appreciating by an average of 6.2% annually since 2012.

With this being said, three of the four major reports used to measure buyer activity have revealed that purchasing demand may be softening. Here are the four indices, how they measure demand (methodology), what their latest reports said, and a quick synopsis of the report.

Methodology: Every month SentriLock, LLC provides NAR Research with data on the number of properties shown by a REALTOR®. Lockboxes made by SentriLock, LLC are used in roughly a third of home showings across the nation. Foot traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future.

Latest Report: “Foot Traffic climbed 3.2 points to 55.8 mid-summer in July. Additionally, the diffusion index is higher than last year by 13.5 points. Despite a healthy economy and labor market, supply and new construction remains unable to keep up with buyer demand.”

Methodology: The ShowingTime Showing Index® tracks the average number of buyer showings on active residential properties on a monthly basis, a highly reliable leading indicator of current and future demand trends.

Latest Report: “Showing activity throughout the country increased by 0.3 percent year over year in July, the third consecutive month that the U.S. ShowingTime Showing Index recorded buyer interest deceleration compared to the previous year. The June 2018 figures revealed a 0.0 percent change in showing traffic from 2017, while May showed a 1.2 percent year-over-year increase. The 12-month average year-over-year increase was 4.6 percent.”

Methodology: The REALTORS Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices and market conditions.

Latest Report: “REALTORS reported slower homebuying activity in July 2018…The REALTORS® Buyer Traffic Index registered at 62, down from the same month one year ago (69). This is the fifth straight month (since March 2018) that Realtors reported a decline in buyer activity compared to conditions one year ago.”

Latest Report: “While we continue to expect a resumption of growth in resale transactions on the back of easing inventory in 2019 and 2020, our real-time view into the market through our Real Estate Broker Survey does suggest that buyers have grown more discerning of late and a level of “pause” has taken hold in many large housing markets. Indicative of this, our broker contacts rated buyer demand at 69 on a 0-100 scale, still above average but down from 74 last year and representing the largest year-over-year decline in the two-year history of our survey.”

Synopsis: Buyer demand is softening

Bottom Line

Again, three of the four most reliable measures of buyer activity are reporting that demand is softening. We had a strong buyers’ market directly after the housing crash which was immediately followed by a strong sellers’ market over the last six years.

If demand continues to soften and supply begins to grow (as is projected to happen), we will return to a more neutral market which will favor neither buyers nor sellers. This “more normal” market will be better for real estate in the long term.

Thinking of Selling your Home? Competition is Coming

The number of building permits issued for single-family homes is the best indicator of how many newly built homes will rise over the next few months. According to the latest U.S. Census Bureau and U.S. Department of Housing & Urban Development Residential Sales Report, the number of these permits were up 7.7% over last year.

How will this impact buyers?

More inventory means more options. Danielle Hale, Realtor.com’s Chief Economist, explained this is good news for the housing market – especially for those looking to buy:

“It’s not spectacular construction growth, but it’s slow and steady in the right direction. Eventually, the pickup in single-family home construction will mean [buyers] will have more options. Especially with the limited number of sales right now, more options are really needed.”

How will this impact sellers?

More inventory means more competition. Today, because of the tremendous lack of inventory, a seller can expect:

A great price on their home as buyers outbid each other for it

A quick sale as buyers have so little to choose from

Fewer hassles as buyers don’t want to “rock the boat” on the deal

With an increase in competition, the seller may not enjoy these same benefits. As Hale said:

“As new construction continues to increase, home shoppers will eventually have more [choices] and a bit more time to make purchase decisions compared to today’s quick-moving housing market.”

Bottom Line

If you are considering the sale of your home, it might make sense to beat this new construction competition to the market.

The Berlin community takes great pride in the academic and athletic excellence that are displayed everyday by the students at Berlin High School. We love to cheer on the Redcoats as they compete every week. Although the seasons are coming to an end, there are still plenty of chances to watch these students in action. Here is a list of the upcoming games and meets for the varsity sports teams at Berlin High School.

It is that spook-tacular time of here! Halloween is just around the corner! With so many Historic Homes sites located throughout central Connecticut, it is easy to get in the spirit of the season. Check out these great Halloween activities through Connecticut Landmarks going on through the end of the month!

Location: Bellamy-Ferriday House and Garden (9 Main Street North, Bethlehem)

Cost: $5 per person, Free for children 4 and under

Enjoy an afternoon full of fun fall activities at Bellamy-Ferriday House and Garden. There will be live music by Allen and Ian Johnson, a pumpkin painting contest, bounce house, temporary tattoos, children’s activities, and so much more! Starting at 2:30 pm, check out the Birds of Prey Program as rehabilitated injured or orphaned birds are showcased. There will also be a raffle with tickets at $2 a piece.

Go on a proper ghost hunt during this grave yard tour at Coventry’s Historic Cemetary. Led by the Seaside Shadows founder, you will use EMF detectors and spirit box communication equipment to interact with the ghosts on site. Reservations are required for this event. Be sure to call (860) 742-6917 or email hale@ctlandmarks.org to reserve your spot today!

On a special candlelight tour, you will be led from room to room until you reach the spooky attic. Hear ghost stories from the Homestead. There will be refreshments served. Be sure to reserve your spot today. Register by calling (860) 742-6917 or emailing hale@ctlandmarks.org.

“Guilford native and American Idol Season 14 top 4 finalist Nick Fradiani Jr. returns to a hero’s welcome Friday. Fradiani, 29, who is Guilford High School graduate, is so popular now that his mere presence in town is necessitating the early dismissal of schools there on Friday. Officials are planning a parade at 3 p.m. and an hour long concert featuring Nick and his Milford bandmates, Beach Avenue at 4 p.m. on the Town Green.” Read more here..

“Celebrate spring at the Wadsworth Atheneum’s 34th Annual Fine Art & Flowers! During this three-day museum fundraiser floral arrangements and garden designs inspired by masterworks from the permanent collection are showcased throughout the galleries.” Read more here..

“CTFastrak is Connecticut's bus rapid transit (BRT) solution to improve mobility and manage congestion in the I-84 New Britain to Hartford corridor. BRT is an innovative, high capacity, cost-effective public transit solution that can significantly improve travel times through heavily-congested areas by using dedicated transit guide ways or lanes to avoid traffic and quickly transport passengers to their destinations.” Read more here..

“An expression of hope and the life-affirming power of music, The Pianist of Willesden Lane tells the true story of a young Jewish musician, who was sent from Nazi-ruled Vienna to the relative safety of London during the Blitzkrieg. In this inspirational show, piano virtuoso Mona Golabek performs some of the world’s most beautiful music as she shares her own mother’s riveting story of survival.” Read more here..

This Saturday, April 18th, children ages 1-10 (and parents) are invited to Lyman Orchards for Connecticut’s one and only apple hunt! To start off this eventful morning, the Orchard’s outdoor grill will open at 8:00am and will be ready to serve customers with breakfast sandwiches and more. The apple hunting schedule from 10:30am - 12:40pm, will allow your little ones to hunt apples through a hay-maze and collect as many as they can with their own age groups. There will also be face painting, a free magic show on the Apple Barrel deck, pony rides, and crafts with macaroni kid!

Some activities require a small fee and tickets for these can be bought at each venue. Visitors are also welcome to stay for lunch. Starting at 11:30am guests can order hotdogs, amazing burgers right off the grill, and more from the outdoor grill. And to end the day with a sweet note, don’t forget to stop by the Bruno Brothers for some delicious kettle corn.

Admission is $6 for children ages 1-10 years old that are participating. All participants will receive a special edition Spring Apple Hunt T-shirt. When pre-registering, add the size of T-shirt needed to your ticket purchase. T-shirts will be given at the check-in table.

Tickets must be ordered in advance, they will no longer take day-of registrations at the Apple Hunt location.